CIO survey reveals surprises

Posted on January 01, 2006

By Dave Simpson

A survey of 100 Fortune 1000 CIOs in the US, conducted by Citigroup, revealed a number of surprising results on the storage front. For example, spending on SAN storage is expected to outpace NAS spending by a 3:1 margin over the next year-and that’s excluding switches and host bus adapters (HBAs). Only 15% of the CIOs surveyed expect to increase their NAS budgets this year, versus nearly triple that amount (43%) predicting an increase in SAN storage spending. In addition, 73% of the CIOs anticipate flat NAS spending while 8% predict lower spending, compared to 49% and 7%, respectively, for SAN storage (see figure).

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When spending on SAN switches and HBAs is factored in, the SAN market appears to be very healthy. For example, 35% of the respondents in Citigroup’s Q4 2005 survey plan to increase SAN spending in 2006, vs. only 7% in a Q3 2005 survey. And none of the respondents in the Q4 survey expect a decline in spending on SANs.

Another mild surprise in the Citigroup Fortune 1000 survey showed up with regard to CIOs’ plans for spending on tape drives/libraries. For example, 21% expect budget increases (vs. 19% in the Q3 survey), while only 14% predict that their tape spending will decrease this year. The other 64% expect tape spending to remain about the same.

Equally surprising in light of the rush to disk-based backup as an alternative to tape, in Citigroup’s Q3 survey 43% of the CIOs placed a high priority on tape replacement, while only 18% cited tape replacement as a high priority in the Q4 survey.

However, Citigroup analyst Paul Mansky concludes: “While over the near term this suggests a slightly more positive outlook for the tape market, our longer-term thesis suggesting erosion of the market at the hands of new low-cost disk storage [e.g., Serial ATA drives] is unchanged.”

As for other storage project priorities, security appears to be on a sharp decline. For example, in Citigroup’s Q3 survey, 38% of the CIOs ranked security as a high priority and 10% ranked it as a low priority. In contrast, in the Q4 survey only 20% of the CIOs ranked security as a high priority and 29% ranked it as a low priority (see table, below).

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Storage project priorities

In terms of storage project priorities, consolidation, compliance and disaster recovery continue to top the charts.

In accordance with other end-user surveys, Citigroup’s shows that the storage virtualization market is still in the nascent stage. More than half (59%) of the CIOs have not deployed and are not evaluating virtualization. That compares to 63% in the previous survey. In terms of mind share in the virtualization market, CIOs cited EMC, IBM, and Hitachi Data Systems (and its resellers Hewlett-Packard and Sun) as the market leaders.

Citigroup analysts remain skeptical about the adoption of storage virtualization for three reasons:

Considerable technical hurdles to achieving full-feature portability;

Disparity among software offerings from different vendors; and

Difficulties in and/or resistance to transitioning away from established maintenance contracts.

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However, the Citigroup survey results are in contrast to those in another Fortune 1000 survey, conducted by TheInfoPro research firm. In that survey, almost 40% of the respondents said they had already implemented storage virtualization, while another 12% are in the pilot/evaluation stage, and approximately 20% plan to implement storage virtualization this year (see figure, above).

The disparity between the two survey results could be due, in part, to end users’ varying definitions of storage virtualization. In addition, TheInfoPro survey focused solely on storage professionals (vs. CIOs only) and, in the case of the virtualization question had a lower response base (50 respondents).

Citigroup analysts note that iSCSI is poised to gain a foothold among SMBs, although not among large enterprises. In Citigroup’s Q3 survey, which polled companies of various sizes, about half (51%) of the respondents had no plans to deploy iSCSI within the next 12 to 18 months, although smaller companies (<$5 billion) were much more likely to adopt iSCSI.

In Citigroup’s Q4 Fortune 1000 survey, only one of the 100 respondents had deployed iSCSI; three planned to deploy it in 2006; and only 19 CIOs said that iSCSI was currently under evaluation. The remaining 77% either had no plans to implement iSCSI or were undecided.

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In TheInfoPro Fortune 1000 survey, 6% of the respondents said they would have IP SANs based on iSCSI by year-end (see figure, above).

Staying power of Fibre Channel

One further surprise in the Citigroup survey was the apparent staying power of Fibre Channel in the face of competition from newer interfaces such as Serial ATA (SATA) and the upcoming Serial Attached SCSI (SAS) interface.

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For example, when asked which disk drive interface is primarily being used today for new capacity additions, 64% of the CIOs cited Fibre Channel, while 14% said parallel SCSI and only 9% responded SATA or SAS (see table, right).

When asked what their primary drive interface will be over the next year, Fibre Channel actually picked up share-to 66% of the respondents-while parallel SCSI slipped to 9% and SATA/SAS stayed flat at 9%. (The remainder of the respondents checked “don’t know.”)

For more on the relative positioning of the various disk drive interfaces, see the Special Report, “Five interfaces, five vendors, five opinions,” on p. 22.

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